Aventine Renewable Energy Holdings Inc
Aventine Renewable Energy — Merger or Acquisition (March 2015)
24 slides from Aventine Renewable Energy's merger presentation, Mar 10, 2015
Slide 1: Pacific Ethanol Corporate Overview: March 10, 2015
1 Leading Producer and Marketer of Low - Carbon Renewable Fuels Strong Long - term Demand for Ethanol Pacific Ethanol Corporate Overview: March 10, 2015 Differentiated Business Model & Diversified Revenue Streams
Slide 2: Forward-looking statements
2 2 Statements contained in this communication that refer to Pacific Ethanol’s estimated or anticipated future results or other n on - historical expressions of fact are forward - looking statements that reflect Pacific Ethanol’s current perspective of existing trends and inf ormation as of the date
Slide 3: Additional Information
3 3 Additional Information This communication is being made partially in respect of the proposed merger between Pacific Ethanol, Inc. and Aventine Renewable Energy Holdings, Inc. In connection with the proposed merger, Pacific Ethanol has filed with the Securities and Exchange Commission a registrat
Slide 4: Founded in 2003, first pure play public ethanol company
Founded in 2003 First pure play public ethanol company – NASDAQ: PEIX Four strategically located bio - refineries in the Western US with combined operating capacity of 200 MGY With production and marketing selling over 500 MGY Current feedstock: corn, sugar, milo & waste beverage products Developing
Slide 5: Recent Highlights
5 5 Recent Highlights Reported strong 2014 financial results $1.1B in net sales A r ecord 513.2M total gallons sold $108.5M in gross profit $ 91.4M in operating income $ 95.0M in Adjusted EBITDA In 2014, significantly reduced debt & increased liquidity ending year with $62M in cash & $114M in workin
Slide 6: Established Strong Foundation for Growth
6 6 Repurchased plant ownership interest, now at 96% Established Strong Foundation for Growth 2014 initiatives have strengthened our balance sheet and improved liquidity Reduced cost of borrowing and enhanced liquidity Reduced overall debt balances • Eliminated parent company debt • Significantly re
Slide 7: Aventine Merger Agreement Highlights
7 7 Aventine Merger Agreement Highlights On Dec. 31, 2014 Pacific Ethanol, Inc. and Aventine Renewable Energy Holdings, Inc. announced a definitive merger agreement under which Pacific Ethanol is to acquire all of the outstanding shares of Aventine in a stock - for - stock merger. Connects Destinati
Slide 8: Expanding Production & Marketing Advantage
8 8 Expanding Production & Marketing Advantage HQ Pacific Ethanol Plants Marketing Partner Plants Terminals Aventine Plants Situated to access markets in 48 states with ethanol production and marketing Increases marketing volume to over 800 million gallons per year Current Western US advantage Enabl
Slide 9: Adding Strategic Assets
9 9 Adding Strategic Assets Location Capacity ( MGY) Production Method Co - Products Pacific Ethanol Stockton, CA 60 Dry Mill Wet distillers grain, corn oil Madera, CA 40 Dry Mill Wet distillers grain, corn oil under construction Burley, ID 60 Dry Mill Wet distillers grain, corn oil Columbia, OR 40
Slide 10: Connecting Destination & Origin Models
10 10 Connecting Destination & Origin Models Blending destination model & origin model provides several benefits Spreads commodity and basis price risks across diverse markets and products enabling optimization of margin management Gains deeper market insight and engagement in all major ethanol and
Slide 11: Renewable Fuel Standard vs. Installed Capacity
11 In billions of gallons (1) Source: PEIX Renewable Fuel Standard (RFS) vs. Installed Capacity (1) Renewable Fuel Standard Breaching the blend wall Only Federal fuels policy to reduce greenhouse gas (GHG) emissions Need regulatory certainty to secure development of cellulosic ethanol projects 0 5 1
Slide 12: California Low-Carbon Fuel Standard
12 California Low - Carbon Fuel Standard The world’s first greenhouse gas standard for transportation fuels CARB re - adopting the Low - Carbon Fuel Standard (LCFS) with a final decision expected in the summer of 2015 ⁻ Regulation requires a 10% reduction in carbon intensity by 2020 CARB evaluating
Slide 13: Ethanol Demand in the U.S.: Need for Higher Octane Fuels
13 • Ethanol most economic source of octane • US regulations moving from 29 mpg to 54.5 mpg average fuel economy by 2025 • Higher compression engines will require higher octane fuels • E30 blend = 95 0ctane fuel of the future • Less consumption of total fuel and higher percentage of ethanol = signif
Slide 14: Ethanol in Demand in Export Markets
14 14 Canada 336 Mexico 30 Brazil 112 UAE 68 Philippines 68 Tunisia 21 India 42 S. Korea 36 (1) Source: RFA 2014 U.S. Ethanol Exports and Imports – Statistical Summary Rest of world = 80 2014 U.S. Exports in Top 10 Global Markets (Figures in millions of gallons) Ethanol in Demand in Export Markets T
Slide 15: Recent Industry Dynamics
15 15 Recent Industry Dynamics Fundamentals unchanged despite recent seasonality Achieving a better supply & demand balance to result in improved production margins US exports remain strong in 2015 Source: CME 1.00 1.50 2.00 2.50 3.00 3.50 4.00 RBOB Gasoline and Ethanol Prices (Nearby Futures) Ethan
Slide 16: Ongoing Capital Projects Improving Long-term Profitability
16 16 Ongoing Capital Projects Improving Long - term Profitability Installing a 3.5MW cogeneration project at Stockton Improving yields with advanced grinding technologies and enzyme/yeast optimization Pacific Ethanol targets plant investments with pay back less than two years Diversifying Revenue I
Slide 17: Strategy for Advanced Biofuels
17 17 Evaluating wheat straw production at Magic Valley & cogeneration projects at California plants Strategy for Advanced Biofuels Running pilot program for anaerobic digestion Working to convert corn fiber into cellulosic ethanol – qualified by the EPA as a cellulosic feedstock under the RFS In de
Slide 18: Financial Overview
18 18 Q4’14 Q4’13 FY 2014 FY 2013 Net sales $ 256,152 $ 215,290 $1,107,412 $ 908,437 Gross profit 18,378 21,596 108,485 32,930 SG&A 4,731 4,372 17,108 14,021 Operating income 13,647 17,224 91,377 18,909 Fair value adjustments 2,205 (2,520) (37,532) (1,013) Interest expense (1,068) (3,688) (9,438) (1
Slide 19: Balance Sheet Highlights
19 19 At: December 31, 2014 December 31, 2013 Cash & cash equivalents $ 62,084 $ 5,151 Current assets $139,551 $ 79,377 Total assets $ 299,502 $ 241,049 Current liabilities $ 25,447 $ 28,216 Total liabilities $ 81,520 $ 146,148 Stockholders’ equity $217,982 $ 94,901 Total liabilities & stockholders’
Slide 20: Plant Improvements
20 20 Plant Improvements In Q2’14, designated $16M CAPEX for plant improvement investments $4.5M spent in 2014 ($ 2.8M in Q4’14) In 2015, expect to spend approximately $30M in CAPEX $ 11.0M on co - generation project $ 11.5M on additional opportunities (remainder from initial $16M budget above) $4M
Slide 21: Focused on Closing Aventine Merger and Improving Long-term Profitability
21 21 Close Aventine Renewable Energy merger (expected Q2’2015) Complete capital improvement projects to improve efficiencies, diversify revenue & feedstock, & further advanced biofuels initiatives Focused on Closing Aventine Merger and Improving Long - term Profitability Integrate production & mark
Slide 22: Appendix / Thank You
22 Appendix Thank You
Slide 23: Use of Non-GAAP Measures
23 23 Use of Non - GAAP Measures Management believes that certain financial measures not in accordance with generally accepted accounting principles (“GAAP”) are useful measures of operations . The company defines Adjusted Net Earnings as unaudited earnings before fair value adjustments and warrant
Slide 24: Non-GAAP Reconciliations
24 24 * Adjusted for non - controlling interests Non - GAAP Reconciliations Q4’14 Q4’13 FY 2014 FY 2013 Net Income (Loss) attributed to Pacific Ethanol $ 12,518 $ 8,593 $ 21,289 $ (781) Adjustments: Interest expense* 967 3,138 8,490 13,260 Provision for income taxes* 1,637 – 15,109 – Extinguishments
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